A monopolist may be able to maximize profit by producing in the inelastic portion of the demand curve if demand is high enough.

Question

Quizplus · Accepted Answer

A monopolist maximizes profit by producing at the quantity where marginal revenue equals marginal cost, which occurs in the elastic portion of the demand curve. Producing in the inelastic portion would mean that the firm could increase total revenue and profit by reducing output.

A Monopolist May Be Able to Maximize Profit by Producing